Her Majesty’s Revenue & Customs (HMRC) is trying to force an arm of the tycoon Sanjeev Gupta’s UK steel empire into insolvency, casting renewed doubt on the future of a business employing close to 2000 people.
Sky News has learnt that a winding-up petition against the speciality steels division of Mr Gupta’s Liberty Steel was filed by the taxman earlier this week.
Sources said the move underlined the continuing fragility of the finances of Britain’s third-biggest steel producer.
The petition is expected to be heard late next month.
Sanjeev Gupta, boss of Liberty Steel
It was unclear on Thursday how much Mr Gupta’s speciality steel business, which operates plants in Rotherham and Stocksbridge, owed HMRC, although one source estimated that it was in the tens of millions of pounds.
The tax authority’s decision to file a winding-up petition follows the expiry late last year of a moratorium against such actions by company creditors.
That measure had been introduced by the government to give company bosses greater protection during the pandemic.
Mr Gupta has been engaged in a precarious financial juggling act since a request for £170m from British taxpayers was rejected in May last year.
His holding company, GFG Alliance, was left scrambling for survival after its principal lender, Greensill Capital, collapsed.
Lex Greensill’s Greensill Capital was GFG’s principal lender
Since then, the tycoon has embarked on several rounds of restructuring, which have included a number of disposals around the world.
By averting outright collapse, Mr Gupta has confounded sceptics who predicted that the steelmaker and its associated businesses would fail within weeks of its plea for government support.
Kwasi Kwarteng, the business secretary, said at the time that the request had been rejected partly as a a result of concerns about the transparency of GFG’s finances.
Controversy has since surrounded taxpayer loan guarantees given to funds extended by Greensill to GFG operations under the Treasury’s various pandemic loan schemes.
A Liberty Steel spokesperson said: “Our priority has been to protect thousands of jobs in the UK.
“We are committed to repaying all our creditors and continue to work with all stakeholders around the UK to create a sustainable future for our businesses following the collapse of Greensill Capital.
“Against a very challenging backdrop in the UK with record high energy prices and imports we have provided tens of millions in funding to keep our people in employment and maintain operations to serve customers and strategic supply chains while we complete our refinancing.
“We are in continuous dialogue with all our creditors including HMRC to find an amicable solution that’s in the best interest of all stakeholders.
“Short-term actions that risk destabilising these efforts are not in anyone’s interest, and undermine creditor recovery at a critical stage in our debt restructuring efforts that seek to secure the future of our businesses.”
The Liberty Steel spokesman declined to comment on the extent of its obligations to HMRC.
HMRC declined to comment further when contacted by Sky News.
For all the latest business News Click Here
